Closes deal on the Zebediela Project

RNS Number : 5937E

URU Metals Limited

11 April 2014

 



11 April, 2014

URU Metals Limited

("URU" or "the Company")

Closes deal on the Zebediela Project

-     Issue of Equity  -

Further to the announcement made on the 27th January 2014, URU Metals Limited (AIM:URU), the  base metals and uranium explorer and development Company, today announces that it has completed the acquisition of shares of Umnex Minerals Limpopo (Pty) Ltd ("UML"), giving it 100 per cent. ownership of UML.

UML is the 100 per cent. legal and beneficial owner of the Zebediela Nickel Project in South Africa.    The Zebediela project is a world class project with combined inferred and indicated resources of over 1.5 billion tonnes of nickel. A NI 43-101 compliant Preliminary Economic Assessment  ("PEA") was completed in 2012 showing  indicated resources of 485.4 million tonnes averaging 0.245% nickel, and additional inferred resources of 1,115.1 million tonnes of 0.248% nickel. 

The Company has acquired an initial 49 per cent. interest in UML. The first tranche of 16,563,896 million new URU shares (the "Initial Consideration Shares"), which are free from trading restrictions, to the UML vendors,are shortly to be issued and admitted to trading on AIM.

Following the acquisition of the balance of UML shares the Company has written to the Minister of Mineral Resources (the "Minister") to obtain consent for the change of control, URU will issue the second tranche of consideration shares (a further 16,630,285 new shares (the "Deferred Consideration Shares") to the UML vendors on receipt of consent from the Minister.  The Deferred Consideration Shares will, once issued, be subject to a lock-in agreement under which 3,326,057 shares will be released from lock-in at quarterly intervals.

Application will be made to the London Stock Exchange for the Initial Consideration Shares to commence trading on AIM.   It is expected that the admission will become effective and that trading in the new Shares will commence on or around 17 April 2014 ("Admission").

Following Admission, the Company's enlarged issued share capital will comprise of 149,340,618 Ordinary Shares. The Company holds zero shares in treasury. Therefore the total number of Ordinary Shares with voting rights is 149,340,618, which figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

For more information contact:

URU Metals Limited David Subotic, Chairman	+ 1 416 892 2870
WH Ireland Limited (Nominated Adviser and  Broker) Adrian Hadden James Bavister	+ 44 207 220 1666
Ribeiro Communications Ana Ribeiro	[phone]

Or log on to our website www.urumetals.com  

Notes to Editors

Background information on the Zebediela Nickel Projects

The Zebediela Nickel Project is located in the Limpopo Province of South Africa close to the platinum mining town of Mokopane, very close to existing rail, highway, and electrical power infrastructure.

The Zebediela Nickel Project is a large disseminated sulphide resource with mining engineering aspects similar to porphyry copper deposits in terms of size and grade.  The NI 43-101-compliant PEA led by the MSA Group outlined indicated resources of 485.4 million tonnes averaging 0.245% nickel, and additional inferred resources of 1,115.1 million tonnes of 0.248% nickel.  The Zebediela Project also contains significant iron minerals in the form of magnetite that is also being investigated as a potential by-product.

The PEA considered the mining and milling of only 500 million tonnes of mineralized material in an open pit mine approximately 1700 m long by 880 m wide by 250 m deep.  The proposed mining rate is 20 million tonnes per annum using a contractor mining fleet.  The strip ratio was calculated to be 0.36:1.

Extensive work was conducted on the Zebediela deposit metallurgy indicating that 50% of the total contained nickel could be recovered into a high quality saleable nickel concentrate averaging 16% Ni.  Start-up capital expenditures including contingencies and working capital are estimated to be $650 million and sustaining capital is estimated at $58 million over the life of the mine.  Operating expenditures are estimated to be $3.35 per pound of recoverable nickel.

The PEA projects a pre-tax and pre-royalty net present value of $1,018 million, an internal rate of return of 25.7% and a 3.8 year payback period at an 8% discount rate using a nickel price of $8.50/lb and a ZAR/USD ratio of 8.1.  Annual cash flow is project to be $203 million.

URU is aware of the potential value of a magnetite as an iron concentrate by-product at Zebediela since the inception of the project.  Metallurgical work investigating by-product magnetite was included in the scope of the PEA investigations, but due to analytical delays, any potential economic impact from iron by-product was not included in the report.

About URU Metals

URU Metals is an AIM listed base metals explorer and development Company. The Company has a diverse portfolio of assets which includes, the Zebediela Project in South Africa, with combined inferred and indicated resources of over 1.5 billion tonnes of nickel.  The Nӓrke Oil/ Uranium Project in Sweden which is 100 per cent owned by URU Metals following the purchase of the entire issued share capital of Svenska Skifferoljeaktiebolaget ("SSOAB") from the vendor Global Hydrocarbons Limited ("GHL"), for a maximum total consideration of $1.078 million in June 2013. A drilling plan to verify historical data is planned in 2014.  As well as the Nueltin Gold-Uranium Project in Canada. URU Metals has an exclusive option agreement with Cameco Corporation ("Cameco"), one of the world's largest uranium companies, to earn a majority interest in Nueltin Lake Gold-Uranium Project ('the Project"), in the Kivalliq Region of the Territory of Nunavut, Canada.due to start Q2 2014.

 

END

 

 

MSCLLFEDSEIILIS